Texas comptroller: Back-to-school shoppers could save up to $92 million during sales tax holiday

Rising consumer confidence seen as driving sales

Texas shoppers could save up to $92 million in state and local sales taxes during this weekend’s sales tax holiday on clothes and school supplies, according to the state comptroller’s office.

The sales tax holiday, which lasts Friday to Sunday, exempts back-to-school items such as book bags, notebooks, clothes and other items that cost less $100. Shoppers will save about $8 per every $100 spent, the comptroller’s office said.

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“As families all over our state prepare to send their children back to school, we hope folks take advantage of this opportunity to get the supplies they need and save some money in the process,” Texas Comptroller Glenn Hegar said in a July news release. “As the father of three young children, I know how these expenses can add up.”

Increased consumer confidence is partially driving the uptick, according to the study: 27 percent of K-12 shoppers and 30 percent of college shoppers say the economy won’t impact their shopping plans, up from 24 percent and 26 percent last year, respectively.

“The budget-conscious consumer is not forgetting about price, quality or value, and we continue to see this when it comes to back-to-school shopping,” Pam Goodfellow, principal analyst at Prosper, said in the report. “That is why many parents are taking advantage of shopping early, scouring ads and websites for the best deals, and taking advantage of free shipping with online purchases.”

Back-to-college shoppers plan to spend, on average, slightly less this year compared to last year: $888.71, down from $899.18 in 2015, the study shows. However, total spending on college items is projected to hit $48.5 billion, up 12.5 percent from $43.1 billion in 2015, because of an influx of new shoppers.

K-12 spenders, the study said, will shell out about $43 more on average than they did last year for school supplies — $673.57, compared to $630.36 last year.

Whether shoppers save during sales tax holiday events is up for debate. Kay Bell, a tax expert for BankRate.com, said consumers time their shopping in accordance with the holiday but may not know which items are exempt and may nullify any savings through impulse purchases of noneligible items.

“It tends to be a psychological benefit,” Bell said.

State lawmakers have tussled over whether to expand or end the tax waiver since it began in 1999. State Sen. Rodney Ellis, D-Houston, and state Rep. Dwayne Bohac, R-Houston, authored bills in 2015 to boost the price limit to $200 and include computers and tablets, but each bill stalled in committee. Four years earlier, lawmakers considered repealing the holiday to generate additional revenue during that year’s budget shortfall.

Some states have scaled back their sales tax holidays. Florida Gov. Rick Scott signed a bill in April reducing that state’s waiver period from 10 days to three, reduced the tax-exempt threshold on eligible clothes from $100 to $60, and eliminated computers from exemption. Louisiana will offer a 3 percent tax rate rather than its usual 5 percent rate on eligible items. However, a shopper who spends $2,500 on one purchase will not be required to pay state sales tax, though the exemption only applies to that first $2,500. And Massachusetts will not hold a holiday for the first time since 2009, citing budgetary concerns.